If anyone understands the business of corporate rescue, it is Kieran Wallace.

The Co Louth native has spent his career helping companies avoid collapse and, when that is no longer possible, winding them up in an orderly fashion.

He did it as a senior partner at KPMG before moving to Interpath Advisory. Along the way, he has worked on some of the country’s biggest insolvencies and restructurings: share receiver to the Quinn Group, special liquidator to IBRC and, more recently, examiner to East Coast Bakehouse.

Wallace has spent much of his professional life dealing with large and complex corporate failures. Yet he believes one of the biggest missed opportunities lies at the other end of the market.

In his view, the Small Company Administrative Rescue Process (Scarp) remains significantly underutilised, despite offering distressed SMEs a relatively low-cost route back to viability.

Introduced in 2021, Scarp was designed as an examinership-lite for small businesses. It strips away much of the court oversight, complexity, and cost associated with examinership while preserving its core objective: giving viable companies breathing space to restructure and survive.

However, despite the benefits of the process. Wallace believes the number of companies utilising the scheme should be far higher.

“The Scarp process is the most affordable rescue process for owner-managed businesses and is totally underutilised,” he says. “In my view, many viable companies still end up in liquidation without considering other cost-effective options like Scarp.”

The numbers bear out Wallace’s assessment, as Niall reported last week.

PwC, which tracks insolvency trends, estimates that SCARP has accounted for just one in every 30 corporate insolvencies over the past five years, averaging between 25 and 30 cases annually from roughly 800 insolvencies each year.

“The figures tell the story — at one in every 30 insolvencies, Scarp hasn’t been taken up in the way many had hoped,” says Ken Tyrrell, restructuring partner with PwC.

Tyrrell is quick to acknowledge that Scarp has operated during an unusually benign period for corporate distress.

“With a buoyant economy, the last five years have been relatively benign for insolvency and restructuring, with the insolvency rate sitting at 27 per 10,000 companies — well below the long-term average of 49 per 10,000,” he says.

But even allowing for that backdrop, he believes the process has failed to establish itself as a meaningful alternative to liquidation.

“Scarp has accounted for just one in every 30 insolvencies over the past five years, averaging around 25 to 30 cases annually out of some 800 insolvencies per year. On any reading, the numbers are underwhelming. It simply hasn’t emerged as a popular restructuring tool for Irish SMEs.”

Tyrrell points to the Personal Insolvency Arrangement (PIA) as evidence that well-designed restructuring frameworks can gain widespread acceptance. Since its introduction in 2013, the PIA has averaged around 800 cases a year over the past five years.

“It’s a good example of a restructuring process that has genuinely delivered,” he says.

For Tyrrell, increasing awareness alone is unlikely to solve the problem.

“At this stage, Scarp needs a fundamental redesign — possibly incorporating some of the more successful features of both PIAs and examinership, the very process Scarp was originally intended to replace as a cheaper, more accessible option for SMEs.”

The Corporate Enforcement Authority (CEA) keeps track of the number of companies availing of the process, as process advisors (the insolvency practitioner who manages the process) are obliged to file notifications with the corporate watchdog. 

During 2025, 23 companies availed of the Scarp process. Of those, a total of 19 resulted in a rescue plan being implemented, according to the CEA.

According to the watchdog, the rescue plan “typically provides for the write-down of liabilities and for the termination of existing onerous contracts, such as leases, once either the contract holder’s consent or Court approval is obtained”. 

“It can also give rise to changes in management as well as the sourcing of additional funding. If a process advisor’s report indicates potential wrongdoing or other issues of concern, the CEA can investigate as considered necessary or appropriate.”

The chart above, based on CEA data, shows which sectors are making use of Scarp. Hospitality is by some distance the biggest user, while the agriculture sector has also embraced the process. The relatively small number of cases means the data should be treated with some caution, however.

Construction, for example, appears underrepresented, although that is partly explained by the fact that many firms in the sector exceed the size thresholds required to qualify for Scarp.

So what happens if a process advisor fails to come up with a scheme? The answer, based on the data, is collapse. Most go into liquidation. Or, in one case, the company went into examinership and successfully exited.

In another case, the scheme was rejected. “In one instance, after the rescue plan had been approved in accordance with section 558Y of the 2014 Act, a creditor filed a notice of objection with the High Court. The objection was ultimately upheld following which the process advisor resigned. The company subsequently entered Court liquidation,” according to the CEA.

Based on the CEA data, management remained in situ in the vast majority of the companies that secured a rescue plan, highlighting the fact that key staff were viewed as core to the success of the business. 

The CEA also shared insight into how the rescue schemes were being funded. 

Some 47 per cent of companies received new equity investment, while the same number also secured loans. A few sought to save the companies through cost-cutting.

The scheme was designed to save jobs. So, how is it performing on that front?

Based on the data, 362 jobs were saved by businesses that successfully completed the process, while 40 jobs were lost. 

Yet that success only serves to underline the wider question. If Scarp can rescue viable businesses, protect jobs, and offer a cheaper alternative to examinership, why are so few companies using it?

Wallace believes the problem is awareness. Tyrrell argues the legislation itself needs to evolve. Either way, Ireland has a restructuring framework that appears to work for those who use it, but remains a niche option for the vast majority of struggling SMEs.

Elsewhere last week…

From semiconductor physics to the courtroom, Fred Logue has emerged as the architect of Ireland’s most significant strategic climate litigation. In an in-depth interview, he reflected on his accidental path to the law, the high-profile detour into planning judicial reviews, and his renewed focus on putting his clients on the State’s climate agenda.

Heating installers the Joule Group claim former employees colluded with rival start-up Neru to steal trade secrets worth millions, even travelling to China on a side mission to source a product Joule was in negotiations to acquire. Francesca has the story.

Cost-rental should be anchored to the cost of providing homes, not an arbitrary discount from market rents, according to Ronan. Until that changes, he argued that Ireland’s flagship social-rental model will work only where market rents are high enough to make the numbers add up.